World Bank Extends Support for Building Capacities in the Hydropower and Mining Sectors in Lao PDR

WASHINGTON, June 3, 2014 – The World Bank’s Board of Executive Directors today approved a US$8.9 million grant and a US$8.9 million credit in additional financing from the International Development Association (IDA) for the Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Project in Lao PDR.

The newly approved financing will complement the World Bank’s ongoing support to the hydropower and mining sectors which are core drivers of growth for the Lao economy, together accounting for over 21 percent of government revenue in 2013. This Project aims to improve human resource capacity and the performance of government oversight institutions in both the hydropower and mining sectors.

The project has already put in place important building blocks for the effective management of hydropower and mining development, and has supported the development of policies, regulations and guidelines for better governance of the two sectors. The project has assisted in strengthening the government’s ability to address key challenges in these sectors through technical advisory services and training, and by creating platforms for inter-governmental cooperation. The project has also assisted the Ministry of Energy and Mines in establishing a legal framework and management tools, such as standard Concession Agreement documents for hydropower and mining, fiscal policy options, hydropower management models, and the Policy on Sustainable Hydropower Development.

With this additional financing, the project will provide further support to develop hydropower and mining sector strategies and high-level policy dialogue in these areas. To enhance institutional sustainability, the additional financing will help improve management of the two sectors through the operationalization of legal, regulatory and technical aspects while strengthening the organizational, managerial and technical capacities of individuals working in these sectors. The additional financing will also help deepen the work on fiscal regimes, local benefits-sharing and financial flows to sectors to enable oversight institutions to carry out their mandate.

This additional financing for the Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Project is an important part of the Lao PDR Country Partnership Strategy (CPS), endorsed by the World Bank Board in March 2012, which aims to improve sustainable natural resources management and strengthening public sector management. The project was originally financed through an IDA grant of US$8 million, approved in 2010, and a grant of US$ 2.54 million from the Australian Department of Foreign Affairs and Trade (DFAT).